Tell a lie a 100 times and it becomes the truth

Hitlers propaganda minister Dr. Goebelles once said "tell a lie a 100 times and it becomes the truth" ..... well history has proven this to be true as he was extremely successful in brain washing the German nation with the Nazi party's propaganda.

Similarly there is so much unfounded market wisdom floating around most beginners or neophyte traders assume all the advice they hear to be true without validating it simply because its been said repeatedly (Dr Goebelles philosophy) and actually waste years of their lives discovering most of what they heard and were told to do were nothing but widespread market myths.

This usually ends in them wasting years of their loves, destroying their accounts and in shattered dreams.

I'm making this post to dispel some of the popular myths which I have found to be false in the hope that it might help some members in some way.

1) Trading is 90% psychology, the answer to profitable trading lies not in a strategy but within you the trader. Be disciplined and patient and you will be profitable.

No it isn't

Trading can broadly be classified into three main components which are well known ie method, mind , money management and they're all equally important. Personally I have found strategy to take precedence among all three and the reason being its very hard to find (or develop) a profitable strategy. Most experience traders know the psychology and money management part. Its true its hard to implement but at least you know what to do.

With regards to strategy you don't. Most strategies will simply no work. If discipline and money management were all that was required then every single EA or automated strategy would be profitable but we find that's not the case in fact the contrary is true most EA's/Robots and automated strategies will eventually lead into deep drawdown and margined out accounts no matter what stop loss & position sizing you programme into it.

Bottom line you need an edge in the markets something with positive expectancy.

If you don't believe this do one thing, take your money out from your brokers account, fly to Maccau or Nepal (you can go to Las Vegas also but its more expensive to travel there) walk into a casino and play any game (except blackjack or video poker) with what ever money mangement, position sizing, risk control you want and see how far you go. Religiously risk 50% of your bank roll or even 0.1% of your bankroll .... whatever you do you are sure to lose all your money and that is a fact.

Now I left out video poker & blackjack .... why is this?

The reason is because these games CAN be profitable over time they can give you positive expectancy, in blackjack if you count cards you can reduce the house edge at times and that's when you bring in your money mangement and discipline and begin increasing your bet size. Why ? well because you know the odds are with you ..... same with video poker.

(note: its increasingly hard to find an edge in blackjack with multiple decks and shuffling machines now-a-days but my I am trying to make a point that you need a profitable strategy)

So a profitable strategy is similar to blackjack or video poker. Not literally of course but I'm just trying to make an illustrative point.

The remaining dozens or possibly hundreds of games no matter how disciplined you are and even if you have a PhD in financial risk management & Psychology & Behavioral finance you will still lose .... for sure.

So I urge you when someone says:

Take a chart plot blue 10sma and red 20sma, ADX, RSI and stochastics. Buy when blue crosses over red and RSI over 50 and stochastics crossover in oversold region, ADX > 20 practice patience and discipline and never risk more than 1% of your account you will get good profit. Oh and I forgot the most famous part ... maintain strict stoploss ... strict stoploss ... you will get good profit.

Chances are it will not work no matter how knowledgeable and disciplined you are. .... so save yourself the time effort and money.

Lastly to the donkeys who may make a post saying you are wrong any strategy traded with discipline and mm will win .. maintain strict stop loss ... strict stop loss .... answer lies within you etc etc "I have nothing to say to you ..... I've heard it all before ... and I agree with whatever you say ... so go to some other thread

#Hello,

*Hello jahan..
Your opinion in # my opinion in * mark..

*What i said in few lines you said the more or less same thing elaborately..just our perspective of looking at it is different..let me explain without being disrespectful...

#From ur above post i can clearly tell that,...u didn't understand markets very well.

*True..still trying to understand..and it will continue always..

#ur talking about certainty in uncertain markets....in my view consistency means following the method/strategy each and every time without altering the rules,irrespective of my trading results....

*I said the same thing..


#who said u that u have to use same lot size

*e.g.you have capital you trade with 1 lot which can stand maximum 10 losses at a stretch, if you increase your lot size 2 or above (stop loss remain constant) in both scenario will you be able to survive in the market?thus same lot..else within 5 or less at a stretch losses your account will
Blow away...

*if you increase your lot size then it should be within your draw down taking capability limit..and should trade the same lot size consistently..


#or u need to get same risk reward ratio(which is Impossible) to be able to get consistent results....
*For me risk reward and winning percentage is inversely related to each other...if your strategy winning percentage decreases still you can make money if your risk reward increases or vice versa..

#infact i told so many times that Risk-reward concept(people say u need probability of 1:3 or more before entering trade,and use T1,T2, T3 as targets) doesn't work...why..bcoz u didn't know the outcome of ur trade in advance.the only control u have at ur end is ur Risk on the trade....
beyond that u have to accept/take what markets gives u.

*E.g.Market gives you 7 win out of 10.each win 5-7 point on an average(market may give more) and one stop loss is 20 points..7*7=49 point win..3*20=60 point loss..brokerage also there..you are in loss even with 70% win rate with what market gives rule.. that is why risk reward and winning percentage are considered together..if we dont achieve our reward target then stop loss will get hit..but when we achieve our reward it will cover all the losses..so we have to find a strategy that considers both risk reward and winning percentage...


#what i care is Average Profit factor over "n" no.of trades
*is not risk reward and winning % is considered after analysing this while selecting strategy?

#when comes to winning percenatge....for me... the lower the better... i can trade 20% winning system why..i know that when i get profits it overcome all my previous losses....

*Again it comes to using risk reward and winning % together..recovering small losses with high reward when you win..

#what i care about is Maxxdrawdown

*Already told about it above..

#and again its a psychological thing.
*Its considered while selecting strategy..
#When comes to Brokerage...yes u have to consider ur brokerage fees in ur Trading strategy without that how can u estimate/trade ur system. i didn't find any firm(broker) who charges Nothing for trading...so that i can waiver that from my system(impossible).

*These days there is unlimited trade, broker are also there..so those who have high trade for them it will be beneficial compared to those who charge per trade basis..and if you have selected your strategy based on unlimited brokerage plan but you trade as per per trade plan then imagine the consequence..

#Regards,

Hitlers propaganda minister Dr. Goebelles once said "tell a lie a 100 times and it becomes the truth" ..... well history has proven this to be true as he was extremely successful in brain washing the German nation with the Nazi party's propaganda.

Similarly there is so much unfounded market wisdom floating around most beginners or neophyte traders assume all the advice they hear to be true without validating it simply because its been said repeatedly (Dr Goebelles philosophy) and actually waste years of their lives discovering most of what they heard and were told to do were nothing but widespread market myths.

This usually ends in them wasting years of their loves, destroying their accounts and in shattered dreams.

I'm making this post to dispel some of the popular myths which I have found to be false in the hope that it might help some members in some way.

1) Trading is 90% psychology, the answer to profitable trading lies not in a strategy but within you the trader. Be disciplined and patient and you will be profitable.

No it isn't

Trading can broadly be classified into three main components which are well known ie method, mind , money management and they're all equally important. Personally I have found strategy to take precedence among all three and the reason being its very hard to find (or develop) a profitable strategy. Most experience traders know the psychology and money management part. Its true its hard to implement but at least you know what to do.

With regards to strategy you don't. Most strategies will simply no work. If discipline and money management were all that was required then every single EA or automated strategy would be profitable but we find that's not the case in fact the contrary is true most EA's/Robots and automated strategies will eventually lead into deep drawdown and margined out accounts no matter what stop loss & position sizing you programme into it.

Bottom line you need an edge in the markets something with positive expectancy.

If you don't believe this do one thing, take your money out from your brokers account, fly to Maccau or Nepal (you can go to Las Vegas also but its more expensive to travel there) walk into a casino and play any game (except blackjack or video poker) with what ever money mangement, position sizing, risk control you want and see how far you go. Religiously risk 50% of your bank roll or even 0.1% of your bankroll .... whatever you do you are sure to lose all your money and that is a fact.

Now I left out video poker & blackjack .... why is this?

The reason is because these games CAN be profitable over time they can give you positive expectancy, in blackjack if you count cards you can reduce the house edge at times and that's when you bring in your money mangement and discipline and begin increasing your bet size. Why ? well because you know the odds are with you ..... same with video poker.

(note: its increasingly hard to find an edge in blackjack with multiple decks and shuffling machines now-a-days but my I am trying to make a point that you need a profitable strategy)

So a profitable strategy is similar to blackjack or video poker. Not literally of course but I'm just trying to make an illustrative point.

The remaining dozens or possibly hundreds of games no matter how disciplined you are and even if you have a PhD in financial risk management & Psychology & Behavioral finance you will still lose .... for sure.

So I urge you when someone says:

Take a chart plot blue 10sma and red 20sma, ADX, RSI and stochastics. Buy when blue crosses over red and RSI over 50 and stochastics crossover in oversold region, ADX > 20 practice patience and discipline and never risk more than 1% of your account you will get good profit. Oh and I forgot the most famous part ... maintain strict stoploss ... strict stoploss ... you will get good profit.

Chances are it will not work no matter how knowledgeable and disciplined you are. .... so save yourself the time effort and money.

Lastly to the donkeys who may make a post saying you are wrong any strategy traded with discipline and mm will win .. maintain strict stop loss ... strict stop loss .... answer lies within you etc etc "I have nothing to say to you ..... I've heard it all before ... and I agree with whatever you say ... so go to some other thread

*Thanks and Regards

Hello,

Building a strategy also psychological in nature....u can't build a strategy beyond ur comfort level.....if this wouldn't be the case we can hire any available strategy and trade according to that....Trading is 100% psychological

Regards,